Are real estate agents allowed to mislead buyers about a 2nd bid?

[Julie Gates]

I'm in Coastal Georgia. I have friends staying with me who moved here and needed to buy a house. The husband told me that when they put an offer in on the house they want, the selling agent stated that there might be another offer, and they needed to bring their best price. He was suspicious because a friend at work got the same information when he put an offer in on a house. Just last night (Saturday night) I signed an offer on an investment property and my agent sent it over. This morning, my agent called to say that the selling agent got right back to her and stated they might have another offer on the property, so I need to give my best price. It hit me that my guest appears to be onto something. Are agents allowed to fudge on other offers? I was under the impression that they are held to a certain standard. (I am not an agent, just an investor). 

I will let you know if I lose the house to this other mystery buyer, but both my guest and his friend got the homes they were bidding on without going up. Things are slow here and I don't see how three properties would be in a bidding war, all in different areas and 2-3 weeks apart. Conspiracy Theory Alert???